Taxes, storm recovery focus of meeting between city leaders, legislators

No topic became a subject of heavy debate during the Tuscaloosa City Council's annual Legislative Breakfast this morning, but state lawmakers said they left with plenty to consider for the 2013 session.

Dusty Compton | Tuscaloosa News

By Jason MortonStaff Writer

Published: Monday, January 28, 2013 at 12:48 p.m.

Last Modified: Monday, January 28, 2013 at 12:48 p.m.

TUSCALOOSA | No topic became a subject of heavy debate during the Tuscaloosa City Council's annual Legislative Breakfast this morning, but state lawmakers said they left with plenty to consider for the 2013 session.

After hearing Mayor Walt Maddox and City Attorney Tim Nunnally highlight a number of issues the city deemed important, state Rep. John Merrill, R-Tuscaloosa, said he intended to focus on ensuring tax and other revenues make it to state and local coffers.

A key concern of the city's is the growing push for national rules to require that sales taxes are collected from every online purchase.

Now, sales taxes are not collected on web-based transactions with businesses that have no brick-and-mortar building within the area from which the purchase was made.

Alabama law says people who make online purchases from businesses that don't collect sales tax should calculate the tax and pay it on their income tax return. But with no mechanism to enforce the provision, few do so.

According to Gov. Robert Bentley's office, this loophole costs Alabama between $300 million and $330 million a year, officials said.

Securing these lost tax dollars is important, but the current plan, city officials said, would centralize sales tax collections at the state level, thereby preventing local revenue collection efforts from monitoring the businesses that fall within its jurisdiction.

Instituting such a method of streamlined sales tax collection would take an act of the U.S. Congress, and Maddox, who said sales tax revenues make up about 40 percent of the city's income budget, urged the local delegation to take no action at the state level until that happens.

Merrill did not argue with the city's position that such a sales tax collection system would harm mid- to small-sized local governments and agreed with the mayor's recommendation that the state Legislature take a wait-and-see approach.

"But whatever we can do to identify that (revenue) and channel it, we need to do it," Merrill said.

Additionally, the mayor and the city attorney said the city was opposed to other proposed moves that will reduce the amount that City Hall can charge for business licenses. These license fees vary from business to business and are based on the amount of revenue each store generates.

But measures that will prohibit cities from assessing fees on the gross receipts that come from business deliveries into the city and exempting all drug sales from counting toward that license fee equation will reduce city revenue and make it harder to provide the services that residents have come to expect, the city attorney said.

"It's only fair to us that everyone pay their fair share," Nunnally said.

Merrill was not alone in supporting the city's request for additional assistance in securing more storm and business recovery funds.

Maddox told the members of the local delegation that $16.6 million in disaster relief funds appropriated to the city last year helped alleviate some of these funding issues, but the storm had highlighted significant deficiencies in the city's infrastructure that must be improved before homes and businesses can fully return.

"Every bit of dollars that we can see and invest back, I think it will only help our recovery," Maddox said.

Rep. Chris England, D-Tuscaloosa, said the mayor's assertion that Tuscaloosa was still dealing with more than $250 million worth of unmet needs was an important issue for the state legislature.

"We need to make sure the city, the county and the state are all on the same page and we continue to work together to get all the assistance that we deserve," England said.

State Sen. Gerald Allen, R-Cottondale, said the city had brought a number of issues to his attention, and this was made evident by the notes he made in the information packet he was give prior to the city's presentation.

Allen, who is entering his third year in the state Senate after serving 16 years in the Alabama House of Representatives, said he appreciated the annual city's breakfast for the ideas it tends to generate.

"Anytime you have progressive leadership like we do in Tuscaloosa, it's so important to have meetings like this to be able to adequately deal with the challenges that we're faced with," Allen said.

He was particularly interested in the city's request for support in raising the amount that City Hall and Tuscaloosa police officers and firefighters contribute to the Tuscaloosa Fire and Pension Fund by .75 percent each.

Allen also was supportive of the move being led by Rep. Alan Harper, D-Aliceville, and endorsed by both the cities of Northport and Tuscaloosa to move a portion of Tuscaloosa's boundary off the northern edge of the Black Warrior River.

"That should've been resolved years ago," Allen said.

The senator did, however, maintain his belief that allocation from beer tax revenues should be revisited, but he was less adamant this year that the proposal he laid out during last year's Legislative Breakfast was the only and proper way to do so.

Allen wants legislation that will redistribute 2 percent of the county's beer tax each to Coaling, Coker and Lake View, which now do not receive a portion of the tax that's estimated at about $2.6 million a year.

The reason these towns get none of the proceeds is because they were incorporated after the county's beer tax proceeds had been distributed to Tuscaloosa County, Tuscaloosa, Northport, Brookwood, Vance and the Tuscaloosa County Parks and Recreation Authority.

Tuscaloosa city officials said they would favor such a reallocation if the distribution percentage was based on point-of-sale or population numbers, but otherwise the city stands firmly opposed.

Allen said that the lack of a consensus has led him to back off a strong push for the change, but he still believes it only fair that Lake View, Coaling and Coker be included.

"That's something we need to work through to ensure we have fairness across the board," Allen said. "We've got to be able to make sure those communities are treated fairly.

"Those three communities, they're a member of the family, and we've got to make sure they're taken care of."

<p>TUSCALOOSA | No topic became a subject of heavy debate during the Tuscaloosa City Council's annual Legislative Breakfast this morning, but state lawmakers said they left with plenty to consider for the 2013 session.</p><p>After hearing Mayor Walt Maddox and City Attorney Tim Nunnally highlight a number of issues the city deemed important, state Rep. John Merrill, R-Tuscaloosa, said he intended to focus on ensuring tax and other revenues make it to state and local coffers.</p><p>A key concern of the city's is the growing push for national rules to require that sales taxes are collected from every online purchase.</p><p>Now, sales taxes are not collected on web-based transactions with businesses that have no brick-and-mortar building within the area from which the purchase was made.</p><p>Alabama law says people who make online purchases from businesses that don't collect sales tax should calculate the tax and pay it on their income tax return. But with no mechanism to enforce the provision, few do so.</p><p>According to Gov. Robert Bentley's office, this loophole costs Alabama between $300 million and $330 million a year, officials said.</p><p>Securing these lost tax dollars is important, but the current plan, city officials said, would centralize sales tax collections at the state level, thereby preventing local revenue collection efforts from monitoring the businesses that fall within its jurisdiction.</p><p>Instituting such a method of streamlined sales tax collection would take an act of the U.S. Congress, and Maddox, who said sales tax revenues make up about 40 percent of the city's income budget, urged the local delegation to take no action at the state level until that happens.</p><p>Merrill did not argue with the city's position that such a sales tax collection system would harm mid- to small-sized local governments and agreed with the mayor's recommendation that the state Legislature take a wait-and-see approach.</p><p>"But whatever we can do to identify that (revenue) and channel it, we need to do it," Merrill said.</p><p>Additionally, the mayor and the city attorney said the city was opposed to other proposed moves that will reduce the amount that City Hall can charge for business licenses. These license fees vary from business to business and are based on the amount of revenue each store generates.</p><p>But measures that will prohibit cities from assessing fees on the gross receipts that come from business deliveries into the city and exempting all drug sales from counting toward that license fee equation will reduce city revenue and make it harder to provide the services that residents have come to expect, the city attorney said.</p><p>"It's only fair to us that everyone pay their fair share," Nunnally said. </p><p>Merrill was not alone in supporting the city's request for additional assistance in securing more storm and business recovery funds.</p><p>Maddox told the members of the local delegation that $16.6 million in disaster relief funds appropriated to the city last year helped alleviate some of these funding issues, but the storm had highlighted significant deficiencies in the city's infrastructure that must be improved before homes and businesses can fully return.</p><p>"Every bit of dollars that we can see and invest back, I think it will only help our recovery," Maddox said.</p><p>Rep. Chris England, D-Tuscaloosa, said the mayor's assertion that Tuscaloosa was still dealing with more than $250 million worth of unmet needs was an important issue for the state legislature.</p><p>"We need to make sure the city, the county and the state are all on the same page and we continue to work together to get all the assistance that we deserve," England said.</p><p>State Sen. Gerald Allen, R-Cottondale, said the city had brought a number of issues to his attention, and this was made evident by the notes he made in the information packet he was give prior to the city's presentation.</p><p>Allen, who is entering his third year in the state Senate after serving 16 years in the Alabama House of Representatives, said he appreciated the annual city's breakfast for the ideas it tends to generate.</p><p>"Anytime you have progressive leadership like we do in Tuscaloosa, it's so important to have meetings like this to be able to adequately deal with the challenges that we're faced with," Allen said.</p><p>He was particularly interested in the city's request for support in raising the amount that City Hall and Tuscaloosa police officers and firefighters contribute to the Tuscaloosa Fire and Pension Fund by .75 percent each.</p><p>Allen also was supportive of the move being led by Rep. Alan Harper, D-Aliceville, and endorsed by both the cities of Northport and Tuscaloosa to move a portion of Tuscaloosa's boundary off the northern edge of the Black Warrior River.</p><p>"That should've been resolved years ago," Allen said.</p><p>The senator did, however, maintain his belief that allocation from beer tax revenues should be revisited, but he was less adamant this year that the proposal he laid out during last year's Legislative Breakfast was the only and proper way to do so.</p><p>Allen wants legislation that will redistribute 2 percent of the county's beer tax each to Coaling, Coker and Lake View, which now do not receive a portion of the tax that's estimated at about $2.6 million a year.</p><p>The reason these towns get none of the proceeds is because they were incorporated after the county's beer tax proceeds had been distributed to Tuscaloosa County, Tuscaloosa, Northport, Brookwood, Vance and the Tuscaloosa County Parks and Recreation Authority.</p><p>Tuscaloosa city officials said they would favor such a reallocation if the distribution percentage was based on point-of-sale or population numbers, but otherwise the city stands firmly opposed.</p><p>Allen said that the lack of a consensus has led him to back off a strong push for the change, but he still believes it only fair that Lake View, Coaling and Coker be included.</p><p>"That's something we need to work through to ensure we have fairness across the board," Allen said. "We've got to be able to make sure those communities are treated fairly.</p><p>"Those three communities, they're a member of the family, and we've got to make sure they're taken care of."</p><p><i>Reach Jason Morton at jason.morton@tuscaloosanews.com or 205-722-0200.</i></p>